Personal Finances in the Era of Modern Technological Solutions

Anna Janina Warchlewska; Alfred Janc; Rafał Iwański

doi:10.18778/2391-6478.1.29.09

Authors

Anna Janina Warchlewska Poznan University of Economics and Business https://orcid.org/0000-0003-0142-7877
Alfred Janc Poznan University of Life Sciences https://orcid.org/0000-0002-0654-1241
Rafał Iwański University of Szczecin https://orcid.org/0000-0001-6345-9677

DOI:

https://doi.org/10.18778/2391-6478.1.29.09

Keywords:

financial education, financial literacy, modern financial technologies

Abstract

The purpose of the article: the aim of the article is to present the essence of personal finance management using modern financial technologies. The paper seeks to answer the question of the impact financial literacy and the growth of the fintech solutions have on personal financial management.

Methodology: the analysis leads to an answer to the question of which determinants have an impact on consumers' financial decisions and what remote tools the market offers. The paper hypothesizes that the intensification of educational activities tailored to each age group by institutions offering financial services may influence the greater use of modern tools in the process of personal finance management. Theoretical considerations are based on an in-depth query of literature on the subject. Research and financial experimentation in the field of financial knowledge and skills are presented. The secondary empirical material is used to analyze the development of the FinTech industry.

Results: The effectiveness of financial education is observed only in specific financial behaviors. The financial industry is shaped by recipients, who instead of financial education, look e.g. financial coaching for a specific problem at different stages of their lives. Changes in population structure (aging population) and a large group of customers from disadvantaged groups (e. i. seniors, disabled people) require the development of new, matched strategies by banks and financial services providers. Too much self-confidence and a low level of consumer knowledge of cybersecurity is becoming a challenge for modern financial technologies.

Downloads

Download data is not yet available.

References

Allied Market Research. (2020). Personal Finance Software Market by Product Type (Web-based Software and -based Software) and End User (Small Businesses Users and Individual Consumers). Global Opportunity Analysis and Industry Mobile Forecast, 2017–2023, https://www.alliedmarketresearch.com/reports-store ; https://www.researchnester.com/reports/portable-solar-charger-market-global-demand-analysis-opportunity-outlook-2023/247 [Accessed 11.12.2020].
Google Scholar

Al-Tamimi, H.A.H. and Bin Kalli, H.A. (2009). Financial literacy and investment decisions of UAE inventors. The Journal of Risk Finance, 10(5), pp. 500–516.
Google Scholar DOI: https://doi.org/10.1108/15265940911001402

Ambuehl, S., Bernheim, B.D. and Lusardi, A. (2017). A method for evaluating the quality of financial decision making, with an application to financial education. National Bureau of Economic Research, NBER Working Paper Series, Working Paper, 20618, pp. 1–46.
Google Scholar

Barembruch, A. (2012). Personal finance management – theory and practice. Scientific Journals of the University of Szczecin. Finances, Financial Markets, Insurance, 50, pp. 239–248.
Google Scholar

Belanche D., Casaló, L.V. and Flavián, C. (2018). Artificial Intelligence in fintech: understanding robo-advisors adoption among customers. Industrial Management & Data System, 119(7), pp. 1411–1430.
Google Scholar DOI: https://doi.org/10.1108/IMDS-08-2018-0368

Bhatia, A., Chandani, A. and Chhateja, J. (2019). Robo advisory and its potential in addressing the behavioral biases of investors – A qualitative study in Indian context. Journal of Behavioral and Experimental Finance, 25(5), 100281, pp. 1–9, https://doi.org/10.1016/j.jbef.2020.100281
Google Scholar DOI: https://doi.org/10.1016/j.jbef.2020.100281

Brugiavini, A., Cavapozzi, D., Padula, M. and Pettinicchi, Y. (2015). Financial Education, Literacy and Investment Attitudes, Netspar, DP-06/2015-014, pp. 1–35.
Google Scholar DOI: https://doi.org/10.2139/ssrn.2637878

Consumer Financial Literacy Survey, (2019). Harris on Demand. The Harris Poll., https://cdn2.hub-spot.net/hubfs/5146491/NFCC_2019%20FLS_datasheet%20with%20key%20find-ings_032519.pdf?utm_referer=https%3A%2F%2Fwww.nfcc.org%2Fresources%2Fclient-im-pact-and-research%2F2019-consumer-financial-literacy-survey%2F [Accessed 05.04.2020].
Google Scholar

EESC, (2018), Financial Education for all. Financial education strategies and best practices within the European Union. Second edition, European Economic and Social Committee, https://www.eesc.europa.eu/sites/default/files/resources/docs/qe-02-16-362-en-n.pdf
Google Scholar

Ernst and Young, (2019). Global FinTech Adoption Index. As FinTech becomes the norm you need to stand out from the crowd, https://assets.ey.com/content/dam/ey-sites/ey-com/en_gl/to-pics/banking-and-capital-markets/ey-global-fintech-adoption-index.pdf [Accessed 07.04.2020].
Google Scholar

Fernandes, D., Lynch Jr., J.G. and Netemeyer, R.G. (2014). Financial literacy, financial education, and downstream financial behaviours. Management Science, 60(8), pp. 1861–1883.
Google Scholar DOI: https://doi.org/10.1287/mnsc.2013.1849

Financial Literacy Around the Word, (2014). Standard & Poor’s Ratings Services Global FinLit Survey, https://gflec.org/wp-content/uploads/2015/11/3313-Finlit_Report_FINAL-5.11.16.pdf?x22667 [Accessed 05.04.2020].
Google Scholar

Flejterski, S. (2007). Metodologia finansów, Warszawa: Wydawcnitwo PWN.
Google Scholar

Frąckiewicz, E. (2019). Nowe technologie na rynku srebrnych konsumentów. Stan, uwarunkowania, perspektywy. Warszawa: CeDeWu.
Google Scholar

Frame, W.S., Wall, L.D. and White L.J. (2018). Technological change and financial innovation in banking: some implications for Fintech. FRB Atlanta Working Paper, 2018-11, pp. 1–33.
Google Scholar

Galperti, S. (2019). A theory of personal budgeting. Theoretical Economics, 14, pp. 173–210.
Google Scholar DOI: https://doi.org/10.3982/TE2881

GUS, (2021). Ageing of population, https://stat.gov.pl/metainformacje/slownik-pojec/pojecia-stosowane-w-statystyce-publicznej/3938,pojecie.html [Accessed 07.03.2021].
Google Scholar

Iwanicz-Drozdowska, M., ed. (2011). Education and financial awareness. Experience and perspectives. Warsaw: Publishing Office of the Warsaw School of Economics.
Google Scholar

Iwański, R. (2017). Nowe oblicza starości z perspektywy dalszego starzenia się populacji. Studia Oeconomica Posnaniensia, 5(11), pp. 113–128.
Google Scholar DOI: https://doi.org/10.18559/SOEP.2017.11.8

Janc, A. and Warchlewska, A. (2018). Educational activities of central banks in the area of economic knowledge and financial competence as a manifestation of corporate social responsibility. In: K. Waliszewski, ed., Social responsibility of financial institutions. From theory to practice. Warsaw: CeDeWu.
Google Scholar

Janc, A., Jurek, M. and Marszałek, P. (2015). Polish Financial System in the Age of Financialization. Warsaw: C.H. Beck Publishing House.
Google Scholar

Jung, D., Dorner, V., Glaser, F. and Morana, S. (2018). Robo-Advisory: Digitalization and Automation of Financial Advisory, Business & Information Systems Engineering, 60, pp. 81–86, doi: 10.1007/S12599-018-0521-9
Google Scholar DOI: https://doi.org/10.1007/s12599-018-0521-9

Kaiser, T. and Menkhoff, L. (2017). Does financial education impact financial literacy and financial behaviour, and if so, when? The World Bank Economic Review, 31(3), pp.611-630, doi: 10.1093/wber/lhx018
Google Scholar DOI: https://doi.org/10.1093/wber/lhx018

Kovlačikova, Z., Smoroň, L. and Strenk, R. (2011). Fundamentals of financial literacy. In: K. Zvaríková and J. Majerová, Financial literacy in the Slovak Republic. Procedia –Social and Behavioral Sciences, 110, pp. 1106–1115.
Google Scholar DOI: https://doi.org/10.1016/j.sbspro.2013.12.957

Liebowitz, J., ed. (2016). Financial literacy education. New York: Auerbach Publications,
Google Scholar

Lusardi, A. (2008). Households saving behaviour: the role of financial literacy. Information, and Financial Education Programs. NBER Working Paper, 13824, pp. 1–44, https://www.nber.org/papers/w13824 [Accessed 05.04.2020].
Google Scholar DOI: https://doi.org/10.3386/w13824

Lusardi, A. and Mitchell, O.S. (2014). The Economic Importance of Financial Literacy: Theory and Evidence. Journal of Economic Literature, 52(1), pp. 5–44.
Google Scholar DOI: https://doi.org/10.1257/jel.52.1.5

Lusardi, A., Michaud, P. C. and Mitchell O.S. (2017). Optimal Financial Knowledge and Wealth Inequality. Journal of Political Economy, 127(2), pp. 1–47.
Google Scholar DOI: https://doi.org/10.1086/690950

Marder, T. (2016). Fintech for the Consumer Market: A Overview. Consumer Compliance Outlook, Third Issue, pp. 4–20, https://www.consumercomplianceoutlook.org/2016/third-issue/fintech-for-the-consumer-market-an-overview/ [Accessed 15.11.2020].
Google Scholar

Melitz, J. (1970). The Polanyi School of anthropology on money: An economist’s view. American Anthropologist. New Series, 72(5), pp. 1020–1040.
Google Scholar DOI: https://doi.org/10.1525/aa.1970.72.5.02a00020

Miller, M., Reichelstein, J., Salas, C. and Zia, B. (2015). Can you help someone become financially capable? A meta-analysis of the literature. World Bank Research Observer, 30(2), pp. 220–246.
Google Scholar DOI: https://doi.org/10.1093/wbro/lkv009

Newsweek, (2019). The best online and mobile banks, https://mobirank.pl/2019/09/24/najlepsze-internetowe-i-mobilne-banki-w-rankingu-newsweeka-2019/ [Accessed 07.04.2020].
Google Scholar

Nicoll, A. (2019). Millennials face $1 trillion of debt, and want money management tools to help them manage their way out of it. But mobile-banking apps are lagging, https://www.businessinsider.com/millennials-want-money-management-features-in-mobile-banking-apps-2019-6?IR=T [Accessed 17.07.2020].
Google Scholar

Noga, B., Noga, M. and Dejnaka A. (2016). Economic education of Polish society, Warsaw: CeDeWu.
Google Scholar

OECD INFE, (2011). Measuring financial literacy: questionnaire and guidance notes for conduction an internationally comaparble surver of financial fiteracy. Paris OECD, https://www.oecd.org/finance/financial-education/49319977.pdf [Accesssed 5.12.2020].
Google Scholar

OECD, (2005). Improving Financial Literacy. Analysis of issues and policies, https://www.oecd-ilibrary.org/finance-and-investment/improving-financial-literacy_fmt-v2005-art11-en [Accessed 05.04.2020].
Google Scholar DOI: https://doi.org/10.1787/9789264012578-en

OECD, (2016). OECD/INFE International Survey of adult financial literacy competencies, https://www.oecd.org/daf/fin/financial-education/OECD-INFE-International-Survey-of-Adult-Financial-Literacy-Competencies.pdf [Accessed 05.04.2020].
Google Scholar

OECD, (2019). Smarter Financial Education. Key lessons from behavioural insights for financial literacy initiatives, http://www.oecd.org/financial/education/smarter-financial-education-behavioural-insights.pdf [Accessed 05.04.2020].
Google Scholar

OECD, (2020). Financial Literacy of Adults in South East Europe, https://www.oecd.org/daf/fin/financial-education/Financial-Literacy-of-Adults-in-South-East Europe.pdf [Accessed 15.11.2020].
Google Scholar

Owsiak, S. (2002). Podstawy nauki finansów (Basics of Finance Science), Warszawa: Wydawnictwo PWN.
Google Scholar

Panos, G.A. and Wilson, J.O.S. (2020). Financial literacy and responsible finance in the FinTech era: capabilities and challenges, The European Journal of Finance, 26(4–5), pp. 297–301, doi.org/10.1080/1351847X.2020.171756
Google Scholar DOI: https://doi.org/10.1080/1351847X.2020.1717569

Popiołek, M. (2013). Wykluczenie cyfrowe w Polsce. Nierówności społeczne a wzrost gospodarczy, 32, pp. 310–320.
Google Scholar

Smyczek, S. (2016). Wiedza finansowa konsumentów w krajach Europy Środkowo-Wschodniej. Studia Ekonomiczne. Zeszyty Naukowe Uniwersytetu Eknomicznego w Katowicach, 303, pp. 24–35.
Google Scholar

Statista.com, (2020). https://www.statista.com/ [Accessed 10.06.2020].
Google Scholar

Świecka, B. and Musiał, M. (2018). Enhancing financial literacy – experiment results. Argumenta Oeconomica Craconiensia, 18, pp. 129–140.
Google Scholar DOI: https://doi.org/10.15678/AOC.2018.1808

Świecka, B., Yeşildağ, E., Özen, E. and Grima, S. (2020). Financial literacy: The case of Poland. Sustainability, 12(2), 700, pp. 1–17, https://doi.org/10.3390/su12020700
Google Scholar DOI: https://doi.org/10.3390/su12020700

Tanda, A. and Schena, C.M. (2019). FinTech, BigTech and Banks. Digitalisation and its impact on banking business models. Palgrave Macmillan, doi. 10.1007/978-3-030-22426-4
Google Scholar DOI: https://doi.org/10.1007/978-3-030-22426-4

Thakor, A.V. (2020). Fintech and banking: what do we know? Journal of Financial Intermediation, 41, 100833, pp. 1-13, doi.org/10.1016/j.jfi.2019.100833.
Google Scholar DOI: https://doi.org/10.1016/j.jfi.2019.100833

Thorun, C. and Diels, J. (2020). Consumer protection technologies: An investigation into the potentials of new digital technologies for consumer policy. Journal of Consumer Policy, 43(1), pp. 177–191, doi: 10.1007/s10603-019-09411-6.
Google Scholar DOI: https://doi.org/10.1007/s10603-019-09411-6

Tomczyńska, W. (2017). Digital exclusion – definicje, przyczyny, przeciwdziałanie. Adeptus, 10, pp. 1–17, https://doi.org/10.11649/a.1503
Google Scholar DOI: https://doi.org/10.11649/a.1503

Volpe, R., Kotel, J. and Chen H. (2002). A survey of investment literacy among on-line investors. Financial Counseling and Planning, 13(1), pp. 1–16.
Google Scholar

Waliszewski, K. (2011). Financial advisory services in Poland. Warsaw: CeDeWu.
Google Scholar

Waliszewski, K. and Warchlewska, A. (2021). How we can benefit from personal finance management applications during the Covid-19 pandemic? The polish case. Enterpreneurship and Sustainability Issues, 8(3), pp. 691–699, doi.org/10.9770/jesi.2021.8.3(42)
Google Scholar DOI: https://doi.org/10.9770/jesi.2021.8.3(42)

Warchlewska, A. and Waliszewski, K. (2020). Who uses robo-advisors? The Polish case. European Research Studies Journal, XXIII(1), Special Issue, pp. 97–114, doi: 10.35808/ersj/1748
Google Scholar DOI: https://doi.org/10.35808/ersj/1748

Willis, L.E. (2011). The financial education fallacy. American Economic Review, 101(3), pp. 429–434.
Google Scholar DOI: https://doi.org/10.1257/aer.101.3.429

Włodarska-Zoła L. (2018). Edukacja finansowa w kontakście zarządzania finansami osobistymi, Edukacja – Technika – Informatyka, 9(3), pp. 184–191.
Google Scholar DOI: https://doi.org/10.15584/eti.2018.3.26

Woodyard, A.S. and Grable, J.E. (2018). Insights into the Users of Robo-Advisory Firms. Journal of Financial Service Professionals, 72(5), pp. 56–66.
Google Scholar

Xiao, J. (2016). Handbook of consumer finance research. Second edition: Springer.
Google Scholar DOI: https://doi.org/10.1007/978-3-319-28887-1

Xie, M. (2019). Development of Artificial Intelligence and Effects on Financial System. Journal of Physics. Conference Series, 1187, 032084, pp. 1–7, doi: 10.1088/1742-6596/1187/3/03208
Google Scholar DOI: https://doi.org/10.1088/1742-6596/1187/3/032084

ZBP, (2020a). Level of financial knowledge of Poles 2020. Congress of Financial Education and Entrepreneurship, https://zbp.pl/getmedia/f26b6c3e-f68b-472e-bd9a-f4384ea9b868/1-Poziom-wiedzy-finansowej-Polakow-2020_na-konferencje-prasowa_skrot_FINAL [Accessed 07.04.2020].
Google Scholar

ZBP, (2020b). Bankowość internetowa, https://zbp.pl/dla-klientow/bezpieczne-bankowanie/bankowosc-internetowa [Accessed 14.11.2020].
Google Scholar